---

Oil futures have been weighed down by some profit taking in the morning, But they regain some ground in the wake of advancing equities around midday. Only the WTI Crude remained softer after weak US economic data and the shut-down of an important refinery. As of now, all contracts have remained within their given trend channels, however. Investors look ahead to the results of the EU summit which are to emerge in the afternoon. These results will impact on the euro/dollar parity and thus probably also on oil prices. The fundamental situation and the state of current demand are unlikely to bring about decisive momentum.

After some profit taking weighed on the oil complex in the morning, prices edged higher on Friday. The spread between the Brent and the WTI crude widened to more than 12 dollars as the pending ban of Iranian oil exports had a stronger impact on the brent than on the WTI. Oil products in particular were supported after the opening of NYMEX session not only by Iran but also by the insolvency of Petroplus refinery and the of an important U.S. refinery. A lower-than-expected estimate on US gross domestic product in the fourth quarter 2011 temporarily weighed on the oil complex, but eventually all contracts settled higher in London and New York.

ICE Gasoil contract for February delivery settled at 953.75 dollars on Friday. This was 9.00 dollars above Thursday's settlement. With some 37,500 contracts the traded volume was significantly below average.

OPEC: Yesterday, Iranian lawmakers stated they were delaying a vote to immediately ban all Iranian oil exports to the EU, whose own embargo is to begin July 1. The legislative decision cast a doubt on whether the measure will ever materialize, particularly after a top lawmaker said he was opposed to a parliamentary vote on such ban. Iran, however, may not need the Parliament to vote for a ban, and could simply invoke a clause of force majeure to interrupt deliveries to the EU. An abrupt interruption of Iran oil imports would hurt Europe by leaving no time to switch to others sources. But it would also impede Tehran's ability to find alternative customers. Iran's oil minister was quoted as saying the country will "soon" halt oil exports to some European Union nations.

The Stochastic oscillator at the ICE futures is still in bullish mode this morning, while the one at the WTI and the gasoline chart is losing its influence, see also technical analysis. Therefore technical analysts are neutral this morning and forecast some profit taking in the morning, while strong fundamentals such as Petroplus' insolvency and the problems with Iran will support oil prices on their high level.

U.S.

Nymex acces losing. Oil futures are losing ground in Asian trading hours and on Globex electronic trading platform this morning on a rising dollar and some profit taking after the Iranian Parliament delayed a vote on an immediate ban of oil exports to the EU. The traded volume is slightly above average. Due to a lack of important economic indicators, market players will eye financial shares and the development of the U.S. dollar today.

Houston (ex-wharf indications 26-1)

380cst $668
180cst $704
MGO $1003

Very tight avails for 180 cst

New Orleans (ex-wharf indications 26-1)

380cst $670
180cst $706
MGO $1005

Singapore (correct as of 14:30 hrs LT - delivered indications)

Crude is losing with WTI -$0.51. Singapore paper is bearish as well, losing with -$4.30 for 180cst and -$3.50 for 380cst for Feb, and for Mar 180 cst -$3.50 and 380cst -$3.00 with MGO Feb contracts at +$0.90 and for Mar +$0.85. The cargo market in line with crude and paper start of the week, losing with 180cst -$0.92, 380cst +$0.54 and MGO +$0.12.

The Singapore fuel oil markets were pretty mixed ranging between -$1.0 to +$0.5 during the morning last Friday. The Singapore heavy residual inventory reported +2.8 mbbl build to 18.13 mbbl; a recent high as incoming cargoes arrived. The delivered bunker premiums were seen around $27.5 above cargo. This morning markets are trading down.

High premiums for prompt deliveries.

380 cst $725
180 cst $740
MGO $940

Fujairah (delivered indications 30-1)

380cst $720
180cst $748
MGO $1050

ARA (Amsterdam - Rotterdam - Antwerp)

High sulfur bunker fuel oil in Northwest Europe maintained values Friday on steady buying interest and little change in 3.5% FOB Rotterdam barges that followed largely flat crude over the day. HSFO supplies for prompt in ARA remained tight on ongoing VLCC fixtures for the Asian market. The backwardation in the Rotterdam HSFO swaps hit its steepest level for nine years. The spread between frontmonth and second-month swaps was assessed at $11.75/mt Thursday, the highest since January 31, 2003, when it was assessed at $12.25/mt in the run-up to the US invasion of Iraq. High Chinese refinery demand is supporting the arbitrage to Singapore. Monday’s one-day general strike in Belgium to protest against austerity measures was expected to cause disruption to prompt bunker supplies well into Tuesday.

Rotterdam

Indications for delivered bunkers:

380cst : $ 675
(1.0 %) :$ 686
180cst: $ 689
(1.0 %):$ 729
MGO 0.1%S: $947